Goldline International is under investigation by the Santa Monica City Attorney’s office, jointly with the Los Angeles County District Attorney’s office, as well as being the subject of a separate investigation by Congress into the possible criminal practices. The firm has been the subject of an ABC Nightline News Exposé, as well as an investigation by NY Congressman Weiner).

Jess Bachman, who did several of the fantastic illustrations for Bailout Nation, turns his graphic expertise to the Glenn Beck/Goldline endorsement scheme:

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click for ginormous version

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FREE: add this infographic to your website!

Embeddable Graphic

600 Pixel Wide Version

New York, NY – Rep. Anthony Weiner (D – Queens & Brooklyn) and House Commerce Subcommittee Chairman Bobby Rush (D – Chicago) formally announced a hearing of the Subcommittee on Commerce, Trade, and Consumer Protection to investigate the business practices of Goldline International, a precious metals dealer that uses aggressive sales tactics and conservative spokespeople such as Fox News’ Glenn Beck to sell overpriced gold coins. Weiner and Rush sent a letter to Goldline requesting information in preparation for the hearing.

The announcement follows an exposé on ABC News which detailed Goldline’s business model. Additionally, the Santa Monica City Attorney’s office launched a joint investigation with the Los Angeles County District Attorney’s office into the possible criminal practices of Goldline International.

The average Goldline markup was 90% above the melt value of the coin. The largest markup on any coin was 208% above the melt value. Furthermore, the average Goldline markup is 47% higher than better-priced competitors, with some of the company’s markups going as high as 102% compared to its competitors on one of the coins they offered.

• Goldline Falsely Claims To Offer “Good” Investments

By selling gold at twice the melt value, the price of gold would need to double for consumers to break even on their “investment.”

Sales people imply that they are “investment advisors” or “financial advisers” by offering investment advice, which insinuates that they have some sort of fiduciary responsibility to get you the most return on your investment.

However, since they are not licensed investment advisors, they have no such responsibility. In 2006, the Missouri Secretary of States’ Office, Securities Division filed formal consent order against Goldline for exactly this reason and recovered over $200k for an elderly consumer that was ripped off.

• Goldline Plays off Public Fears of Government Takeover and Has Formed an Unholy Alliance with Conservative Pundits to Drive a False Narrative

Goldline employs several conservative pundits to act as shills for its’ precious metal business, including Glenn Beck, Mike Huckabee, Laura Ingraham, and Fred Thompson. By drumming up public fears during financially uncertain times, conservative pundits are able to drive a false narrative. Glenn Beck for example has dedicated entire segments of his program to explaining why the U.S. money supply is destined for hyperinflation with Barack Obama as president. He will often promote the purchase of gold as the only safe investment alternative for consumers who want to safeguard their livelihoods. When the show cuts to commercial break, viewers are treated to an advertisement from Goldline.

“Goldline rips off consumers, uses misleading and possibly illegal sales tactics, and deliberately manipulates public fears of an impending government takeover – this is a trifecta of terrible business practices,” Weiner said. “It’s disgraceful that this company would capitalize on financially unstable times to prey upon people’s nest eggs.”

Rep. Weiner, who sits on the House Subcommittee on Commerce, Trade and Consumer Protection, wrote letters to the SEC and FTC requesting that they investigate Goldline and is proposing legislation that would force Goldline and companies like it to fully disclose their dishonest business practices. Under Rep. Weiner’s plan, Goldline would be required to show consumers its full business model including its astronomical markups and deceitful promises of profitability. No date has been announced but it is expected that the hearings will be held later this summer.

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

149 Responses to “Fools Gold: Inside the Glenn Beck Goldline Scheme”

I have a relative who thinks Glen Beck can walk on water. I don’t know if my relative buys gold from Glen Beck, but would not be surprised.

It’s not against the law to overcharge for assets if you give buyers enough information to make informed decisions. Are idiotic time shares going to be criminalized next? When HFT bids the stock up on no volume and a sucker chases momentum and buys, why is that legal and Beck’s sponsor a bad person?

I have no problem with Fox News acting as a predator towards it’s viewers. Stupid is as stupid does. Besides, I’m not sure I understand the equity or intelligence of protecting people who hate namby pamby nanny government. They’ll only hate you for it.

“Sales people imply that they are “investment advisors” or “financial advisers” by offering investment advice, which insinuates that they have some sort of fiduciary responsibility to get you the most return on your investment.”
False. A registered investment adviser under the Adviser Act of 1940 is required to always put the interest of his/her clients first and to provide clients with full, complete and timely disclosure of all conflicts of interest material to the client/adviser relationship. While maximizing investment returns is always a preferred goal, this may conflict with other goals the client may determine to be of higher importance.
Beck needs to be called out and fully exposed.

ignorant, greedy consumers…. no? (note: i couldn’t give two craps about Glenn Beck or Goldline – i have no soft spot in my heart for either of them, and it does seem like there are some actual fraudulent claims made by Goldline, but my point is that people who are overpaying for 20 Franc French Roosters have no clue what they are doing, and should be held responsible for their own ignorant actions (fueled by greed) as well)

if i go to buy a new car and the dealer talks me into overpaying for the SuperXtra model filled with crap I don’t need, whose fault is that? Or, continuing with the car example, if i pay the sticker price, instead of the invoice price, whose fault is that?

This is a particularly nasty example of payola in the “news” media but not an unusual thing. Ultimately when our masters have used up a useful idiot like Glen Beck, he will be sacrificed by his masters and burned at the stake by his worshippers. Then our masters will find another useful idiot, pump him/her up to godlike status on their corporate media and manipulate the idiot masses to once again act against their own interest and be fleeced as a reward.

This is about Gold, Currency, the end of the US (hence everyone needs Gold!),

reply:
————
When the US ends, guns will be worth more than gold. Charmin will be more valuable than the greenback and more useful.

Surprisingly, I think everyday life will continue pretty normal. Bankers will whine and Wall Street hucksters will be sent to stand against the wall, but I think we’ll see a rapid recovery after that (hint hint)

Have to agree with KidDynamite >> Take responsibility for your own actions.

Rep. Weiner’s idea is pure BS. No company is going to be required to divulge their markups. You’d hear all sorts of holy hell being raised if that propasal even starts to see the light of day. Soon all companies would be under the gun to divulge that information. Doing so gives away too many competitive advantages to competing businesses.

The minute I start defending you as an “objective observer” you publish this!? Stick to capital markets and stay out of politics. Unless of course you want to publish the vast trail of corruption from Geitner, Kerry, Rangel, Daschle, Solis, and yes, even your beloved weiner. You might piss off your buddies at the Hamptons but at least your readers will respect you.

C’mon, separate yourself from the liberal herd and keep some shred of credibility!

~~~

BR: So another words, you like when i am objective, except when it is about someone you are a fanboy of?

Not meaning to be a smarty in an open forum but since you offer the image as an embeddable graphic to others might want to spell check it. I noticed in bottom right corner you obviously meant to write “Brought” not “Brough.”

Didn’t know how else to bring this to your attention. Was there a better way?

You cultivate young animals and domesticate them to your wishes. You keep them captive and feed them what you think will benefit you the most in the long run. Then you take them to slaughter for profit. It’s a great business model … Trolling For Stupid For Fun And Profit. “Have You Ever Bought Gold From Glen Beck?” should be a question on aptitude tests. If you’re shopping for stupid, you found a candidate if the answer ‘yes’.

All that’s left is for evolution to create the sucker who begs to be taken, such as the cows who beg customers to eat them at the Restaurant at the End of the Universe.

You want to triple gold sales, Glen Beck??? I know how. First. start wearing a gold ear ring, then add a gold chain to your wardrobe. Jewelry gold has artistic value and the markup can be huge. Goldline will have to add a new building just for that venture. Now you’re selling coins and jewelry. Next, add a gold crown to your front teeth and show it off. VaVoom. Everyone will want one.

Of course not. Typically (in my opinion) you take a slight left skewed, somewhat even handed approach OR you at least disclaim someone else’s research as potentially bias. Should Faber, Rogers or any other financial news guest fall under congressional investigation because they talk up gold, ag, any other already established position? Healthy skepticism is great. If Beck worked for MSNBC I can assure you this would be a non-issue.

Glen Beck, Has Fluffy gone of to her reward and you miss her so badly you can’t go on? Perhaps Goldline can dip you beloved pet in gold and immortalize Fluffy like the pharaohs. How will Fluffy know you really loved her if you don’t keep her forever. Don’t be like your neighbors when they tossed Patches out in a Hefty Bag. He even started to smell. Poor Patches. He wasn’t loved. Show Fluffy you love her and place a golden Fluffy in a place of respect in your home, today.

Those who really expect an economic collapse should just buy a few cases of bar soap and store them in the attic. It lasts forever, doesn’t have any special storage requirements, and can easily be battered for other things.

I think lot of commenters are missing the importance of this story. Glenn Beck is the de facto leader of the Tea Party and he has been actively been aiding a company that he knew, or should have known, was ripping off his viewers and taking their retirement savings. He personally sad “Call Goldline…Trust the people at Goldline.”

Either he is so stupid that he doesn’t know this company is corrupt, or he doesn’t care if his viewers lose their retirement savings, or both. This speks volumes about the integrity of the person most admired by the tea party.

I think lot of commenters are missing the importance of this story. Glenn Beck is the de facto leader of the Tea Party and he has been actively been aiding a company that he knew, or should have known, was ripping off his viewers and taking their retirement savings. He personally sad “Call Goldline…Trust the people at Goldline.”

Either he is so stupid that he doesn’t know this company is corrupt, or he doesn’t care if his viewers lose their retirement savings, or both. This speaks volumes about the integrity of the person most admired by the tea party.

So Glenn Beck ensures that his show has sponsors by actively promoting a company that then rips off his customers? Harvard Business School case study! Extra credit for those who can find new ways for this company to rip off more customers.

I wonder if someday the word “conservative” will have the same “nanny-nanny-boo-boo” boogeyman effect on people that the term “liberal” has gotten (hence the change to “progressive”) over the past 20-30 years? Probably not.

I don’t want to start a war here, but I know making a comment like I’m about to make could be polarizing:

Glenn Beck is a f-ing idiot.

Now, since you know how I truly feel, you will observe that most of his cult are from red states like the one I live in. They hang on his every word, probably moreso than the hardcore Obama-Worshippers. I hate that politics and media in this country have devolved into blowhards and women from Alaska whom most men would “bone”. The dumbing down of America was one of the keenest observations, yet most obvious ones, in the history of time. Seriously. Someone had to say that we are becoming a nation of “think-for-me’s”. This is what I regret the most about living in the age I live in now. I can only hope that we have an intellectual revolution that is as profound as the Industrial and Sexual revolutions were. People like Glenn Beck should be exposed as the morons that they are, and publicly rediculed for even attempting to “inform” us.

yes barry – fraud IS fraud – and Glenn Beck should be called out for endorsing a company with business practices like this and ridiculed. I agree with that. And I’m not defending Goldline’s business practices.

my point was simply that, still, we need to hold the buyers accountable for their own greed/ignorance/stupidity/actions. I know you’re not holding up Goldline’s customers as poor victims, but that’s usually the next step in this line of thinking – and i am adamant that they are not innocent victims, even if Goldline made claims like “Glenn buys these” and “these things are a wicked pissah investment”

which kinda leads to the question: in the end, SALESMANSHIP is kind all about taking advantage of ignorance, greed, fear, etc – isn’t it?

Funny thing — Beck touts hyperinflation as our economic downfall. I thought it was DE-flation that the rest of the country was worried about, at least those who pay attention. (Oh, that’s right.. these are Fox viewers we’re talking about.)

I’ve tried watching Beck on occasion just so I could see for myself if it was as bad as people claim. Turns out it was worse. I watched his interiew of Sarah Palin, and Palin came off as the articulate one in the room.

As for whether or not BR should stick to markets & economics and stay away from politics — it’s his blog. He can post what he wants. Read it… or don’t.

ashpelham2: Nothing new here. I take it you haven’t seen/read Fahrenheit 451.

Beck is safe though; any charges against him (and he looks like he’s involved in selling “securities” of some type) will be defended as persecution of him by the liberal government that can’t stand “the truth.”

@ashpelham2 Says: July 28th, 2010 at 11:31 am
———–
RE the entire post: Were we separated at birth?

Anyone seen the 1957 movie “A Face in the Crowd?” The parallels between the main character (played very darkly by Andy Griffith) and Glenn Beck are incredible. As I watched it, I wondered how the film maker in the mid-5o’s could see into 2010 with that laser precision.

Here’s the plot synopsis from IMDB: “An Arkansas hobo becomes an overnight media sensation. But as he becomes drunk with fame and power, will he ever be exposed as the fraud he has become?”

Too funny. For a second I thought I was at The Onion. I couldn’t imagine anyone wasting their time creating the graphic posted here…let alone offering an embed link.

Let me get this straight: Goldline publishes/charges prices which happen to be outrageously high (FOR A FLIPPIN COMMODITY) and Glenn Beck dupes his viewers into paying outrageously high prices by saying the sky is falling?

Where’s the crime? Is it illegal to sell something to stupid people? Imagine how much fun we could have creating “infographics” for everyone who “overcharges” for a product, service or commodity?

How about some of us who are fortunate enough to have a mind less capable of being hoodwinked by such goons take responsibility for those less fortunate – after all many of our loved ones are in the latter category through no fault of their own (personality type, IQ, “Street smarts” – inborn traits). Yes, we try to convince them rationally, etc, but we know how that ends up all too frequently. Still, if they fall for such stupid crap as this scam, it hurts us as well.

Yes, I know that to an extent this type of BS is what marketing is about and you cannot open your eyes without seeing someone trying to scam you to some degree for their own gain, but we as a society should do what we can to keep that in check. When some fu**er like Beck or the Goldline crew stick that neck out too far, they should be smacked. How else will we keep our society on the tracks?

Are you starved for ratings or something? You know of course that using terms such as ‘gold’ and ‘Glenn Beck’ drive both the left and the right crazy.

What I don’t get is why you choose this topic for your audience. You have hit books, a hit website, and many media appearances. Why turn yourself into another political hack?

Furthermore, if you’d like to attack anyone who sells something that is overpriced, why not stick to loaded mutual funds, realtors, and the ponzi scheme that is social security. Talk to truth to power, stop pandering to your audience.

Regards,

A fan who would love some real talk on real issues

~~~

BR: Yeah, maybe I should cover some real issues. All of this nonsense stuff I have been writing about for 7 years are just so much superficial fluff.

I agree. Since when did it become OK to exploit other peoples weaknesses. If this kind of exploitation is not illegal then something is wrong with the laws. We do not allow those whose advantage is physical strength to exploit the weaker, why should be allow those with mental advantages to exploit the weaker. A society should be judged by how it treats its weakest members and on that account ours is barely above third world status.

[...] Barry Ritholz notes that things have taken a turn for the worse: Goldline International is under investigation by the Santa Monica City Attorney’s office, jointly with the Los Angeles County District Attorney’s office, as well as being the subject of a separate investigation by Congress into the possible criminal practices. The firm has been the subject of an ABC Nightline News Exposé, as well as an investigation by NY Congressman Weiner). [...]

I’ve been following reading this site daily for atleast a couple of years and finally signed up to comment.

“”inessence Says:

July 28th, 2010 at 9:47 am
“Sales people imply that they are “investment advisors” or “financial advisers” by offering investment advice, which insinuates that they have some sort of fiduciary responsibility to get you the most return on your investment.”
False. A registered investment adviser under the Adviser Act of 1940 is required to always put the interest of his/her clients first and to provide clients with full, complete and timely disclosure of all conflicts of interest material to the client/adviser relationship. While maximizing investment returns is always a preferred goal, this may conflict with other goals the client may determine to be of higher importance.
Beck needs to be called out and fully exposed. “”

This has been a running battle that RIAs have had with the SEC & FINRA for a long time. Many people including brokers call themselves some sort of ‘advisor’ and RIAs argue that title should be reserved for those registered as an RIA. BUT, big loophole, if you fall into a category not covered by the SEC or FINRA – like gold/nusmatics, insurance, currency, etc. you can pretty much get away with calling yourself anything you want. In fact the SEC & FINRA continually put off the requirment for brokers to have to be Series 65/66 registered to call themselves advisors. In fact, the salespeople of Goldmine have no responsibilty to the sheeple that they shear (I also find it interesting how close their name is to Goldman…).

While I generally find the site interesting and informative, the war against FOX, Republicans and their shills (like Beck) would be more interesting if it also included a discussion of say tax evasion like the one perpetuated by Sen Kerry or the graft and corruption by Congressman Rangel. There are plenty of examples on both sides, like the Green Funds that so many Congressrats have invested in (and I am pro green) and then push bills that favor their funds(another interesting story the media ignores) helping Al Gore to buy yet another ginormous energy consuming home.

For the most part the political class has no ones interest in mind but their own.

The same people here who accuse Barry of being too “Political” or “Liberal” more than likely spent allot of time shouting down dissenters who opposed the invasion of Iraq and the Bush Tax Cuts and a host of other Right Wing Financial and De-regulatory “Free Market Libertarians” Frauds on Fox Business News Channel… Yaaaaaawn.

Thanks the Graphics Barry and keep exposing any and all financial frauds you come across.

To paraphrase: They came for the stupid but I am not stupid so I did nothing…They came for the foolish but I am not foolish so I did nothing…They came for the viewers of Glenn Beck’s Show but of course I did not watch his show so I did nothing…Then they came for me and there was no one left to help me.”

Barry’s right…A crime is a crime is a crime no matter who perpetrates it or who is a victim of it.

The only exception is if the seller actively concealed latent defects or otherwise made material misrepresentations amounting to fraud.

Beck is an entertainer. Let’s remember that. I have been following this since before the investigation. He is very careful to always say “find out if gold is right for you. it’s not for everyone”. Television is chocked full of people hawking stuff that is grossly overpriced and worthless. Countless advertisements fit this bill.

Does anyone find it strange or wonder why this guy is being singled out? This is a slippery slope.

KidDynamite, and should be held responsible for their own ignorant actions (fueled by greed)

Fueled by paranoia, actually. And the desire to envision yourself powerful when those you hate are suffering (End Times beliefs produces this pleasure too.)

Your sentiment is true enough, unless it grows bad enough that the exploited get screwed to the point of getting angry and their anger gets exploited enough to grow dangerous. We know they have no clue who is really responsible for what.

Other than that, let them take their money.

For some asset classes, strict regulation regarding consumer protection does pay out even barring preventing unrest. It sucks that the republicans bitched and whined to remove the amendment requiring a standardized cover page on all mortgage contracts. There is no reason for resisting that unless you plan on screwing 60% of households, which means cutting a boatload of kids short of their parents having money to raise them in some kind of comfort. That impacts everyone.

“If gold was to go again from $800 to $200 you would have plenty of warning to sell.”

I asked who was going to give me that warning. He said, drum roll please….they would. Everyone should call and have this conversation. Block your number and only give them your first name. Ask them the same questions I did before they get any details from you. It’s an experience!

call yourselves what you will, but there are many left leaning ideologues on this site. please just be honest about it. i have no affiliation with either side as they both employ similar tactics to reach different objectives. i’ve watched glenn beck and while he does use the usual fear mongering and demagoguery his liberal counterparts use i do find his underlying logic more compelling than the opposition. lesser of two evils i guess.

Great work Barry! Through his books and posts, he does what a real financial press should…illuminate not obfuscate. I had the sole(of 10people) Beck watcher on my trade desk choking on his breakfast this a.m.! Priceless!

dwkunkel , I asked my dad about a year ago what was valuable during the great depression as barter. I tossed out some of the obvious ideas like bottles of booze, ammo, stuff like that. He just gave me the oddest look and said, “Meat.”

I cannot help but notice that not a single person who have objected to this post responded to the facts on the ground — that Goldline is a shady outfit, that this reflects poorly on Beck’s judgment, that GL (not GB) are under criminal investigation.

Lots of heat, no light.

I must add that the same sort of poor judgment is why Ben Stein was shit-canned from the NYT . . .

Of course Goldline is trying to sell something. I think the response “duh” is most appropriate. This is why noone responds against the charges that they might be overcharging.

The issue at hand is whether we need to prevent the people from everyone who might wish to sell them something at anything greater than cost, or a government dictated “fair profit”. Last time I checked, the gold market is a competitive marketplace, and GL is not a monopoly. A quick search online yields plenty of other places to buy a gold coin. Furthermore, these sites can quote what they would buy your coin back from you for.

Do we need to protect every sucker?

“Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience.”
– C.S. Lewis

BTW, I’m not saying goldline is undeserving. As a matter of fact the whole gold industry has a lot to answer for with its ridiculous price premiums. The apple doesn’t fall far from the tree though. The reason the physical market is so whacked out is because the paper gold market is one of the most blatant ponzi schemes in the world……yet the corrupt congress can not see a problem there….only one way down the line where gold is leaking out of the circle

Re. the “guns, gold or butter” debate … with over 200 million guns in the U.S. and more eminently manufacturable on short notice from cheap and plentiful raw materials, pardon me if I’m not acutely concerned about a looming shortage in arms should civil order break down. Gold will still have a crucial role as a compact store of wealth in such circumstances.

But…the “gold to the moon” bugs are just as misguided as the guns-and-ammo freaks. Gold has risen to something more akin to its “true” price level as the hoi polloi have fled from the same risk assets whose bubbles encouraged people to plow their money into the equity markets and overpriced housing instead of tangible wealth like PMs, thus keeping the price of the latter suppressed fro a generation – but no good reason to expect another 4-5x runup in a persistently deflationary environment.

This sort of crap needs to be exposed as much as possible. This gives as many of the more marginal sheep a better chance to avoid being roped in.

My only big complaint about that graphic is the claim that FDR’s confiscation of gold bolstered the economy. In a graphic that otherwise sticks to the facts and is non-partisan, that is a statement f opinion that many would disagree with.

So what if the political opposition leading an investigation isn’t pure as the driven snow? We want an open a society as possible, we all benefit from that, and give the stuff decision makers can hide, encouraging them to rat each other out is the best mechanism for accomplishing that. If you are waiting for someone pure to come be your savior, nothing will ever be fixed. The system contains politicians. We have to work with that because it ain’t going to change.

BR is actually doing Beck a favor (at least in the short term). This is exactly the attention he makes the best use of, the downtrodden and persecuted who no one dares let talk because they are skeeered . . .

The efforts of the gov’t to take a run at Beck is simply a witch hunt and a diversion. The root of the issue is that the currency is being inflated, which creates demand for alternative stores of wealth.

I cannot help but notice that not a single person who have objected to this post responded to the facts on the ground — that Goldline is a shady outfit, that this reflects poorly on Beck’s judgment, that GL (not GB) are under criminal investigation.

I must add that the same sort of poor judgment is why Ben Stein was shit-canned from the NYT . . .

reply:
———–
GL may be shady but what’s your point? Real Estate Time Shares sold under pressure during a three day prize seminar are legal. What’s the difference? Competitive jealousy? If the rubes are paying too much for gold, then they won’t have the cash available to pay too much for proper investments. I have no problem whatsoever with Fox News skinning their sheep. I approve.

Sorry, but to me, this looks a little like a jobs issue between Goldline and a jealous Wall Street.

Apples and oranges Fox News and the NYT. Are you expressing shock and amazement that Fox News doesn’t have a inkling of Goldline’s reputation and they are going to be gobsmacked by your revelation?

“I cannot help but notice that not a single person who have objected to this post responded to the facts on the ground — that Goldline is a shady outfit, that this reflects poorly on Beck’s judgment, that GL (not GB) are under criminal investigation. ”

Barry,

Your audience is made up of internet blog readers. If you run a pole you will find a strong majority of us are reading (and commenting) at some subset of Shedlock, Zero Hedge, Calculated risk, Delong, Freakonomics, Mankiw, McCardle, Naked Capatalism…

The scam you are pointing out, when held against a backdrop of Goldman Sachs standard operating procedures, looks like chihuahua stuck between elephant toes.

Relative to the fine GS just paid for defrauding its customers, Glen Beck’s net worth plus Goldline’s lifetime cumulative revenue is a pimple.

holy shi’ite, batman! you mean finreg and the new cftc czar haven’t fixed this yet?!

have to agree with the caveat emptor’s, take responsibility for your own actions/decisions. by the way, does finreg regulate stupid, too? ironically, a goldline commercial is on as i type. also, last time i checked an investigation or expose does not a guilty person make; however, if they’re guilty, string the bastards up.

reply:
——–
No, he’s not a librul. He’s angry that he has to follow rules that they avoid. No prospectus. No registered representatives. High frickin’ margins from grateful customers. Numismatic value (ha ha ha). No suitability considerations (as if).

Competitive jealousy. Congress is being used to take sides while looking like consumer advocates.

Is GL shady or are they guilty of fraud? What is shady? If they are guilty of fraud, then the facts will come out and Beck will look like an idiot. If they aren’t guilty of fraud, then its caveat emptor.

What will happen to the investment of these gullible people when Gold will end its bull run or take a breather from its bull run??

When the Fed funds rate will start climbing up (starting 1Q 2011) the Gold bull run will either end or take a very long breather. This “investment” is down 30 to 40 % already when the Gold price is still near its all time high … what happens when the Gold price is around $800 (where it started the last leg of the bull run) !!!!

grego001 says: ” Last time I checked, the gold market is a competitive marketplace, and GL is not a monopoly.”

greg0001, you are a prophet.

That’s the problem. It’s too competitive and not regulated enough. Once we can find a fraudster, then we can call for more regulation. Then we can write a big, long bill that protects consumers. Then we can have more lobbyists to focus on making sure the regulations go their way. Then we can finally have another industry that is controlled by corporate oligarchy and propped up by governmental intervention and governmental privilege, thus reducing competition. Rinse and repeat.

(this is not a defense of GL or GB. if they are guilty of fraud or have broken laws they should be prosecuted and forced to pay restitution or put out of business).

“I cannot help but notice that not a single person who have objected to this post responded to the facts on the ground — that Goldline is a shady outfit, that this reflects poorly on Beck’s judgment, that GL (not GB) are under criminal investigation. ”

(disclaimer – i don’t care about BR’s political position one way or the other, i just like blog)

I am going to take a stab at it….no one really cares about Goldline.
With all due respect, and i do mean with all due respect, everyone recognizes (whether they want to admit it or not) that if it were not for Glenn Beck being the face man, it is unlikely anyone would be talking about it.
Mock that statement if you have nothing else to say.
I don’t believe anyone (TBP posters, congress, City Attorney’s offices or whomever) cares about what Goldline does or how they do it. People might SAY they do, but they really don’t. There are waaaaay bigger fish to fry than GL. Not to mention many other similar gold selling outfits do the same thing, Swiss America, Roseland Caplital, there are others….where are they mentioned?

Goldline’s shadyness is a just sideshow to the real agenda of defaming their face man. Ironically, Glenn Beck as a tea party hero is the best thing the left has going for it come election season as opponents of the left become more fragmented by the day.

“it’s unacceptable that this company is preying on public fears to sell its products.” – Rep. Anthony Weiner

Just replace the word “company” with “federal government” and you might have something.

We can do what we choose, the question is why our host chose not to ignore it. Among the thousands of examples of shadiness and fraud, why does this one make the cut?

1) Political guilt by association. I believe the spotlight has lingered on a certain former Alaskan governor at least in part because it is fun for one team to help keep the worst idiots of the other on the front page as often as possible. Beck does for the Republican party what Mel Gibson does for christianity, Jesse Jackson does for the black middle class, Al Gore does for global warming and Mike Tyson does for boxing.

2) A good traffic enhancer. Like pitting Lakshman (still silent, must be guilty) vs Shedlock, or evaluating the relative stupidity of presidents it draws participation and sharing out of the woodwork.

3) A message about gold as an investment, especially for Beck’s audience demographic.

BR wrote: “I cannot help but notice that not a single person who have objected to this post responded to the facts on the ground — that Goldline is a shady outfit, that this reflects poorly on Beck’s judgment, that GL (not GB) are under criminal investigation. ”

on the contrary, barry, I wrote earlier “Glenn Beck should be called out for endorsing a company with business practices like this and ridiculed. I agree with that. And I’m not defending Goldline’s business practices”

but you of all people should understand the difference between shady business practices, and failure of fiduciary duty – of which Goldline has ABSOLUTELY NONE.

FRAUD is the one that matters. Hard selling is not a crime. Poor performance is not a crime. Unsuitable advice is not a crime (they’re not your investment adviser!) . Inappropriate advice is not a crime.

This is about Gold, Currency, the end of the US (hence everyone needs Gold!)

If it is truly about the end of the US, everyone first needs a way to get a lock on real food and pure water way, way more than gold. Any fungible ( if not its authenticity suspect) concentrated pile of stuff can be stolen by theft be it by ruthless individuals or government executive order, i.e pirates….and you can’t run or swim away with it on you.
Better be thinking of creating or co-locating with something people need and/or crave.

Lee Majors shilling for hearing aids or Sally Fields pushing Boniva is one thing – but cashing out the retirement to buy over-priced gold because the de-facto leader of the Tea Party “suggests” that Armageddon is right around the corner is, imo, a bit different.

From an objective point of view, I’m trying to distinguish the Beck/Goldline scenario from:

Ed McMahon selling overpriced insurance.

Any actress or model selling overpriced handbags.

Any actor or sports figure selling overpriced watches.

The entire diamond industry.

One could argue that Goldline is less culpable. The coins they sell are a literal commodity (no differentiation like diamonds), they don’t make the coins, they are available from many sources, and they have a readily-ascertainable objective market value.

I am having a hard time finding meaningful distinctions in the fact patterns here. Can someone help (that is, without partisan ranting).

It seems that someone would have to show a greater duty on Beck’s part. On one hand, Tiffany’s offering an overpriced diamond is OK because they are merely a merchant and have no special duty (nor a duty by NYT for publishing the ads, for that matter). But is there a duty on Beck and his network that is higher than a merchant or advertiser? Are we living in a country where Merrill Lynch doesn’t have fiduciary duties when they tout stocks that their internal analysts have trashed, but an entertainer HAS a fiduciary duty? Someone take a swing at that pitch.

OK. So the customers should be buying bullion coins. OK, the customer shouldn’t be getting screwed on markup, which might be unreasonably high in this case.

I have a better idea. Instead of trying to create chart porn with a goofy agenda, why not do the gold customer a service and tell them how to simply call up Johnson-Matthey and buy good delivery bars? That’s the way to get the lowest price above spot, IMO.

Sounds like the party is over for you Goldline. It’s cute that you really thought they were going to let you get away with this. Now you need to get with the program and start using your profits for campaign contributions and lobbyists. Welcome to the big leagues boys.

Don’t parse. You nailed it on post 1. Why can’t Glen B and Goldline sell the shit out of overpriced gold coins. This isn’t like a roofer driving up to an elderly person and saying they would like to use leftover materials on the shoddy roof on your house and please pay a large cash deposit. This isn’t a phony reward scam where party 1 claims there is a reward for a valuable object and, later, party 2 finds it and offers it for sale to the people who heard party 2′s offer. This isn’t a bar bet.

It’s Fox News exploiting the crap out of it’s viewers for the purpose of openly selling overpriced crap to buyers who could easily become knowledgeable if they wanted to. It’s the cult exploiting the sheep. It’s poetry.

It’s also legal when GS does it on a larger scale to wealthy idiots and countries run by idiot and TBTF manager idiots. It’s also legal under countless mainstream analogous situations. I support Fox, GB, and GL.

Remember with Bill Clinton “it was just sex”. Well this is just one advertiser and it’s only gold. Not such a big deal unless you want it to be. Evidently some of you do. I’m sure that a lot of the brand names have been scared off Beck’s show by some left-leaning social groups, he is left with a different set of advertiser choices. That’s OK, Glenn’s a big boy with a VERY loyal viewership, he can take it. As we should see in DC on August 28.

I think David Ogilvy said it well when someone complained about a point on an ad: “It’s just advertising.” I’m sure Beck doesn’t want to mislead, but he’s pretty busy with content and show prep.

Anyway, it’s not like a tv host has a fiduciary responsibility (see Goldman Sachs) to the viewers. Remember every week night at 5:00. Enjoy the show.

Actually, there is a difference. Goldman Sachs is governed by the securities standard of being required to disclose any material fact relevant to making the investment decision. Note the difference. Goldman is creating the security and the particular design that gives it a particular value. Without a requirement full disclosure the asymmetry of information would create too much opportunity for fraud, so Congress create the Securities Act of 1933.

Government-issued gold coins are not securities, they are commodities. Goldline doesn’t create the value (France did) or have any special information asymmetry. I haven’t heard any claim of lack of full disclosure by Goldline.

If an auto dealer puts a $39,000 price tag on a $35,000 MSRP Accord, and someone buys it, should that be illegal?

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About Barry Ritholtz

Ritholtz has been observing capital markets with a critical eye for 20 years. With a background in math & sciences and a law school degree, he is not your typical Wall St. persona. He left Law for Finance, working as a trader, researcher and strategist before graduating to asset managementRead More...

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